The latest US CPI data for May, which showed a decrease in inflation, has sparked a strong recovery in the major cryptocurrencies.
Ethereum has seen a surge in buying activity and on-chain metrics are on the rise. The price of ETH is currently facing resistance at $3,660 and has support at $3,430. If the buying momentum continues, there is potential for ETH to surge towards $3,740 and even reach $4,000.
The release of the May US Consumer Price Index (CPI) data revealed a slight drop in inflation, going from 3.4% in April to 3.3% in May. This positive news has had a significant impact on the cryptocurrency market, leading to a strong rebound in major crypto assets.
As Bitcoin inches closer to the $70,000 mark, Ethereum has also experienced increased buying activity and is testing key price levels while seeing a rise in on-chain metrics.
The stable CPI report for May has surpassed economists’ expectations of a 0.1% increase, showing improvement from April’s 0.3% rise. The annual CPI increase of 3.3% aligns with predictions, although it is slightly lower than the previous month’s 3.4%.
The crypto market responded positively to this softer CPI report, with BTC price surging towards $70,000 and ETH price challenging the $3,700 level.
Data from IntoTheBlock indicates a significant increase in large transaction volume over the past 48 hours, with Ethereum whales conducting transactions worth over $13 billion. This surge in whale activity suggests that major investors are accumulating ETH at various price levels, anticipating a significant move and contributing to increased volatility.
While Ethereum continues to dominate the layer 1 sector, Solana is making notable progress in terms of on-chain activity. Data from DappRadar shows a 9% decrease in Ethereum’s NFT volume over the past week, reaching 105 million. This could potentially accelerate bearish trends for ETH despite its recent price recovery.
Currently, Ethereum is on a strong upward trend but is facing resistance around the $3,660 level, indicating possible profit-taking by short-term traders. Buyers have successfully pushed the price above immediate Fibonacci channels and are now aiming for a surge above the EMA trend lines.
If the buying momentum persists, it would signal that bulls have effectively turned the $3,430 level into a support zone, increasing the likelihood of a surge towards the $3,740 target. A breakthrough at this level could potentially propel the price towards the $4,000 milestone.